Aviva (LSE:AV.) shares have become hugely popular with income investors in recent years, and it’s easy to see why.
The dividend yield currently sits at a chunky 5.8%, comfortably ahead of the FTSE 100 3% average. But according to the latest long-term analyst forecasts, that yield could climb even further. In fact, based on today’s share price, it could almost double to nearly 9% within the next four years!
Aviva dividend forecast to 2031
Based on current analyst estimates, here’s how the payout is expected to grow over the coming years:
| Fiscal Year | Dividend per Share | Forward Yield |
| 2025 | 39.3p | 5.8% |
| 2026 | 42.6p | 6.3% |
| 2027 | 46.5p | 6.9% |
| 2028 | 50.8p | 7.6% |
| 2029 | 55.5p | 8.3% |
| 2030 | 60.6p | 9.0% |
Needless to say, a 9% annualised growth rate is a genuinely exciting trajectory. But long-term forecasts like these are never set in stone. So what actually needs to happen for this to play out?
Why the growth story looks credible
The good news is that Aviva’s underlying business gives some real weight to these forecasts. The first quarter trading update for 2026 showed General Insurance premiums surging 19% to £3.4bn, while the combined operating ratio, a key measure of underwriting profitability, improved by 2.5 percentage points to 94.1%.
As a quick crash course, a lower combined ratio means more profit is being kept from every pound of premium collected, so that improvement matters a great deal.
Wealth net flows also jumped 49% to £3.3bn, driven by a 71% surge in Workplace pension inflows. That’s a business quietly becoming the UK’s largest player in workplace pensions, with all the recurring fee income that comes with it.
The Direct Line acquisition is integrating ahead of schedule too, with management expecting to deliver capital synergies of more than £350m by the end of the year. That extra capital headroom is exactly what supports future dividend growth, and management has guided for 11% operating earnings per share growth annually through to 2028.
So is this dividend growth a done deal?
What could derail it?
While Aviva’s seemingly on track, there are a couple of things worth watching. Bulk Purchase Annuity volumes fell a sharp 52% in the first quarter as competition intensified. This is a meaningful profit engine for Aviva’s retirement business, and sustained weakness here could slow the earnings growth that ultimately funds the dividend.
Debt’s also a bigger consideration than it used to be. Following the Direct Line deal, Aviva’s leverage ratio’s risen to 31.6%. That’s manageable today, but it does mean less financial flexibility if conditions turn tougher than expected.
Aviva shares have delivered six consecutive years of dividend growth, and that track record counts for something. But investors should treat the long-term forecast as a reasonable expectation, not a guarantee.
The bottom line
Aviva looks like a well-run financial institution with genuine momentum across insurance, wealth and retirement, backed by a management team clearly focused on shareholder returns.
For patient income investors willing to look past near-term noise in Bulk Purchase Annuities, I think this dividend growth story is definitely worth mulling. And it’s not the only income stock I’ve got my eye on right now…
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Zaven Boyrazian does not hold any positions in the companies mentioned.
